As a general rule of thumb, one big order ships for less than three smaller orders. That means consolidating multiple orders into a single shipment whenever possible, and always striving to minimize the number of packages you send. All too often, shipments are arranged as they come in from sales or order processing. However, a little planning and visibility goes along ways towards shipping savings.

As the example below shows, one 30 pound small package shipped via FedEx produces a 27% expense reduction over shipping two separate small packages, netting almost $6 in savings.

When it comes to small package shipping, these savings - although seemingly small at times - definitely add up over time. However, when you consolidate LTL freight shipments, the savings become immediately more impressive. As the example below shows, by consolidating three 300 pound shipments into one 900 pound freight shipment, the shippers was able to save 25% - or $454.24 - on their freight shipping expense.

Consolidating orders provides additional benefits to both shippers and receivers (consignees) of small package and LTL freight shipments, including:

• Reduced shipping supply expenses
• Greater fuel efficiency (better on the environment)
• Less time needed to receive, handle, and restock orders

One strategy for shipment consolidation is to create a simple shipping guide that takes into consideration all of your business rules for carriers, weight breaks, orders, and shipping contacts. Distribute this guide to your vendors and discuss it with your customers. A little communication can often go a long way towards small business savings. If you need a partner to help you through the process, you can always call on PartnerShip ... we're here to help.

Sometimes you just don't know what you don't know. This is especially true when it comes to LTL freight rates. Because there are so many variables that go into your bottom-line LTL freight pricing - such as commodity classification, base rate schedules, discounts, accessorial fees, etc. - it's difficult to really understand if you're getting the best rate when you call your carrier or 3PL for that LTL freight quote. As shown in the example below, sometimes the "highest discount" doesn't always mean the "lowest price."

For this reason, PartnerShip began offering a no-obligation FREE freight analysis service a few years ago to help small businesses sort through their current freight rates to ensure they aren't leaving money on the table. We run several of these analyses for customers every week, and requesting a freight analysis is as simple as:

• Visit PartnerShip.com and complete or brief Freight Analysis Form.

• In the About Your Shipments section of this form, let us know what you are shipping, how frequently you are shipping, and a general idea of where you are shipping to our from.

• If possible, also provide us with examples in an email to select@PartnerShip.com. This could be a few recent freight invoices, or better yet, send us a simple Excel file with recent shipments, including the following four pieces of information: Origin ZIP, Destination ZIP, weight, and commodity type (or classification).

Once we have your request, our LTL freight experts will analyze your shipments to determine your current freight rates. Then we will review the best rates we have in place with our best-in-class LTL transportation carriers to see if you can save additional money on part or all of your shipping. Again, our free freight analysis comes with no-obligation - if you already have the best market rates, we'll let you know so that you can continue to enjoy them.

If you're wondering how your current LTL freight rates compare, before (or after) you ask for that next LTL freight quote from your existing carrier, consider having PartnerShip provide you with a free freight analysis to make sure you are getting the best deal possible.

Like many small businesses, you may not currently have control over the shipments coming into your business. It is common for small businesses to let the vendor shipping the product to you arrange the carrier, select the mode of transportation, and manage the actual pickup and delivery times. In some cases, the convenience of this sort of arrangement may work well for your situation. However, that convenience comes with a cost: you may find that you are paying significantly more for inbound shipping than if you had arranged for it on your own.

Reducing inbound shipping costs is one of the easiest, yet most overlooked ways to reduce your overall transportation expenses. Since you are the buyer of the goods, you can and should determine how those goods are shipped to you. When you control and route your own inbound shipments, you have an excellent opportunity to lower your costs.

Here is a quick, three-step process for getting control of your inbound shipping expenses:

1. Look at one or two invoices from your major suppliers. See what dollar amount they allocate for “shipping and handling.”

2. Compare your suppliers’ freight shipping rates with the rates you have in place with your preferred shipping provider. If you’re a PartnerShip customer, you can easily log into our website and perform a couple rate quotes to see how your freight rates compare (or just give us a call – we’ll do it for you).

3. If you find your rates are lower, draw up a letter for your purchasing department to forward to your suppliers providing details on how you want your products shipped, your small package carrier account number, and your preferred LTL freight carriers (again, PartnerShip can do all of this for you if you’d prefer). The letter also acts as an insurance policy if your supplier mistakenly ships by a carrier not on your routing letter. Having a signed letter allows you to charge vendors back for their mistakes.

Updating your routing instructions with all of your suppliers is the first important step in gaining control of your inbound shipping costs. Ensure your products are delivered to you via your preferred carriers and at your known rates. This takes the unpredictability out of inbound shipping costs, and can save you money in the process.

With ever-soaring fuel costs and the resulting rise in shipping rates, many businesses may find their profit margins shrinking even as production increases. Many small businesses use e-commerce in the start-up stages, but with the recent rise in shipping rates, owners are looking for ways to reduce shipping costs.  

In-House Strategies

• Postage meters are an inexpensive way to save time and money for companies that either ship very small light weight products or for which shipping is a smaller portion of their overall product delivery.  A Postage meter will weigh packages accurately, assess precise postage charges and print the shipping label. By taking the guessing out of shipping estimates, both your company and your customer will be satisfied, and shipping overages will be eliminated.

• Compare services and pricing for each carrier on common shipping requirements. Factor in delivery time as well as shipping costs; customers satisfaction is higher when delivery times are shorter.  Eventually you'll gain a picture of what shipping criteria is best serviced by which service. For example FedEx Express has overnight and 2-day delivery options for small packages, but if your shipment is heavier (more than 10 pounds) and isn't under strict time constraints, it might be more cost-effective to use FedEx Ground service.

Outbound Shipping Solutions for Larger Volumes

• Consolidate your orders into less-than-truckload (LTL) freight shipments (more than 200 pounds) could save you even more on shipping. If your company has multiple products going to the same customer, it might make sense to consolidate them into one shipment and use an LTL freight carrier like UPS Freight or YRC Freight. You'll pay quite a bit less than parcel or express service and your liability coverage will be much better as well should there be any loss or damage in transit. 

• Work with a third party logistics (3PL) company. If you don't have the time or resources to figure out which carriers and services would be best for your shipping volumes, a company like PartnerShip can handle the logistics for you and often negotiate a better overall shipping rate for you.

Inbound Shipping Costs

• Small business owners may lump their inbound freight costs into the cost of goods, but poor inbound freight management can severely impact your gross profit margin.  Be sure every vendor invoice is reviewed for hidden fees. Vendors can inflate "Shipping and Handling" fees to compensate for lower priced items. 

• Send routing instructions to your vendors specifying which carriers you want them to use when shipping you your products. You can also set up a direct billing account for vendors that ship to you via FedEx or LTL freight carriers through your 3PL partner. With a direct relationship, you'll be able to track shipping volume putting you in a place to negotiate a better overall rate. 

Small businesses must continually adjust their practices to survive and grow in today's economic climate. Adapting to rising shipping costs is something your company can't afford not to do.